Kiss Your Momma Binary Options Strategy
Hello traders. Welcome to Binary Options Strategy and the 10th module, Trading Binary Options Using Price Action. In this lesson, you will learn how to trade binary options using the KYM method. Now let’s start by defining what the KYM method is. The KYM method stands for Kiss Your Mama. This is a very simple price action method that is based on the logic that a level that is broken will be retested to the other side before price continues with the move.
Now when we’re talking about levels, we’re talking about support and resistance levels. Because we are trading binary options, it’s quite difficult to trade the breakouts of support and resistance the moment they happen because of the momentum that it implies the breakout. This is due to the nature of options and not being able to trade pending orders. Now if you follow me on this rationale, I’m going to try to explain to you why we are going to use the KYM method when we trade breakouts of support and resistance.
When price is testing at level of support and breaks below it, it’s going to be very hard for you to have the best feel or the best price for you to buy the put options that you need to buy in order profit from the move. So you need to wait for the KYM in order for you to trade the entire move. Just because we can’t trade the actual breakout, it doesn’t mean that we can’t trade the overall move. We need to be careful, though, and have patience. Always wait for the KYM on a breakout and never chase the move.
When you’re trading binary options, this is crucial. If you try to chase the move, you are going to lose money in the long run. Sometimes the breakout is going to be very strong and there’s not going to be a KYM for you to able to trade put options if you are trading a breakout of support or call options if you are trading a breakout of resistance. But it doesn’t matter. Trading is not about profiting from 100% of the move that you see on your charts. Trading is about being profitable in the long run by taking the best possible setups that you can find.
Now I’m going to show you an example of a KYM on a breakout of support. As you can see, prices move into the down side, and right here it tested this area of support and it moved up. This means that we found buyers at this area. You can see the move to the down side was very strong, and then we have a very crucial rejection candle and then it moved up. This means that we found buyers here at this level of support and then we retested the same level and buyers kept pushing price up. This means that even though we had strong sellers to the down side they were unable to break with this support level due to the buy orders that we found at this area right here. Then price comes again in a very strong move to the down side and retest this area, and as you can see we break through the down side. This is why we are not going to be able to trade the actual breakout with binary option.
Let’s say that you see the breakout right here and then this huge candle comes and you buy put options at this level. What happens? Price is going to retrace back and retest this area of support as resistance and you are going to be placed in and out of the money put options. So what you need to do is look for the breakout then wait for price to retest the same area of support now as resistance, such as in this case. When you see the price has rejected this area as resistance, this would mean that one, the buyers that we found at this level right here are no longer there and they have flipped to the short side of things. Then when you get the rejection, you buy a put option and you can profit from the continuation of the move, and this is how you are going to trade breakouts of support and breakouts of resistance.
It’s the same story on the up side. Let’s say that price is testing this area of resistance and then it breaks to the up side. You are going to wait for price to retrace back to this area tested as support, rejected as support, and then buy call options for you to able to profit from the move to the up side. It’s as simple as that but you have to be very patient and you have to be critically disciplined in order for you to profit in the long run using the KYM method.